CBN should curb use cryptocurrencies as a channel for diaspora remittances- ABCON

The Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the apex bank, the Central Bank of Nigeria (CBN) to introduce measures that will curb the use cryptocurrencies as a channel for diaspora remittances.
The call was made by the body during  its Quarterly Economic Review for the first quarter of of the year
Acccording to ABCON, such measures need to be taken with a view to redirecting diaspora remittance inflow away from cryptocurrency exchanges to official channels.
ABCON commended the apex bank  for the N5/$1 rebate scheme introduced to encourage diaspora Nigerians to use official channels for remittance transfer
Speaking further, it stated  that CBN needs to focus on other issues driving the patronage of cryptocurrency exchanges for remittance transfer.
“It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding cryptocurrency a safe haven for their wealth in case of any eventuality.”
ABCON also said it is concerned over the country’s huge unemployment rate.
It stressed: “It is absolutely necessary for government to apply radical approaches with the use of both conventional and unconventional economic and political tools to redress the trend.
“The cost of governance in Nigeria, which is believed to rank among the highest in the world, must be drastically reduced to support social security funding.
“The National Identification Number (NIN) exercise should be immediately linked to social security process.
“Fiscal policy must interplay with Monetary to promote critical sectors of the economy where youths are employable. These include but not limited to agriculture, raw materials production chain and social/security services.”
ABCON added that in most emerging markets, bitcoin transfers experienced upward trajectory last year, adding that the pandemic exposed the cheaper and more efficient digital remittance services.
“Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.
“These exchanges override the political complications of official channels.The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
“Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the International Money Transfer Operators (IMTOs) and the exchange rate.
“Strategies that satisfy the most sensitive of these advantages of cryptocurrency exchanges must be introduced to redirect flows to the official channel,” it said.